The International Monetary Fund (IMF) on Tuesday (April 9th) worsened its forecast for Iran's recession, with the slump denting overall growth in the Middle East and North Africa, AFP reported.
The global lender's World Economic Outlook projected Iran's economy will shrink by a massive 6% this year, its worst performance since it contracted by 7.7% in 2012.
The latest figure represented a sharp deterioration from October's prediction of a 3.6% contraction, as US sanctions batter Iran’s oil sector.
The report also estimated that Iran's economy, the second largest in the region behind Saudi Arabia, shrunk by 3.9% in 2018, as opposed to 1.5% projected earlier.
The prediction of deeper pain for Iran, lower oil growth and civil strife saw the IMF cut its overall forecast for the Middle East and North Africa to 1.3%, down 0.9% from January.
"The outlook for the region is weighed down by multiple factors, including slower oil gross domestic product (GDP) growth in Saudi Arabia... US sanctions in Iran and civil tensions and conflict across several other economies, including Iraq, Syria and Yemen," the IMF said.
It maintained its projections for Saudi Arabia, saying the region's leading economy is expected to grow by a muted 1.8% this year and 2.1% in 2020.
The IMF said it expected the kingdom's growth, which reached 2.2% last year, to stabilise at a modest rate in the medium term due to the subdued outlook for oil prices and output.
Overall the wider regional economy is projected to improve in 2020 to a healthy growth rate of 3.2%, the IMF said.